Our Manifestos

Understanding The New Consumer Contract

The media and marketing industry has long been guilty of beating consumers (aka people) over the head with commercial brand messages until they pay attention. This mass marketing approach is crudely military with big brands seeking maximium reach and frequency by launching campaigns that seek to cut-through and penetrate. However, modern networked media has put the power back in the hands of individuals who are simply able to turn off, fast-forward, filter out and unsubscribe from irritating ads. This has left brands in a quandary about how to reach consumers and build that illusive equity that encourages shareholders to keep investing their shekels. However, whilst mass marketing results in the majority of folk covering their ears, the new alternative may leave them looking over their shoulders. This is because big brands are increasingly focusing on mass-snooping exercises to gather data about individuals in the hope of identifying likely customers. Clearly, the collection of information about people isn't new. The direct marketing industry has been with us...

...a good while and its focus has always been establishing information at an individual level. And twenty years ago Tesco’s clubcard began a revolution by examining every electronic customer transaction and building detailed profiles of likely future behaviour. Furthermore, a decade back, the Search phenomenon exploded allowing people to flag their purchasing intentions through Google and Yahoo’s indexes - information that was then sold onto brands keen to fulfil the order.

However, today’s world of so-called Big Data, and specifically the explosion of information about individuals' online activity, makes all that has gone before look positively quaint. Facebook sucks up the identities of one billion individuals around the world. Mobile groovyware tracks the locations of gazillions of folk as they go about their daily lives. Tracking cookies (that register as spyware in most anti-malware utilities) follow people's online paths. Social 'firehoses' are crunched in real-time to spot insights into people’s dreams and desires. Search engines build profiles of people to personalise results - sometimes before a request is made. Algorthmic machines examine online till rolls. Connected TVs monitor what people are watching and sometimes - even who is watching. Sensors built into everything from cars to domestic devices report back to distant databases.

Digital Trails

The result is rivers of bits and bytes composed of a gazillion individual actions that every second pour into the data centres of the world’s techno super-predators. All driven forwards by underlying technological developments including powerful open-source developer communities using Hadoop and GitHub, low-cost hardware, and super-cheap storage and memory.

While the growth of this area can be astonishing, what's most interesting is how this information is being used and its implications for the relationship between big brands and customers. A frenzy of analytical services has appeared that slice and dice these digital trails promising brands the answer to every problem they’ve ever had.

Demand-side platforms, real-time bidding and retargeting systems allow brands to buy audiences rather than media, which is ad speak for following people around the online shopping malls and bombarding them with advertising as they approach the checkout. Additionally, clever integrated systems are appearing that gather disparate data sources to build pictures of households and what they’re actually doing - rather than what they say they are doing.

In short, we seem to be swapping a world where brands carpet bomb neighbourhoods with commercial messages to one where they hide in their gardens with a pair of binoculars.

The Creepy Line

Consumers (aka people) continue to fight back against mass-snooping by demanding tools to help them hide away. The scale and prominence of this ongoing battle was highlighted recently when a group of American Congressman lobbied the Federal Trade Commission - no less - about its involvement with WC3’s attempts to standardize Do Not Track (DNT) features on web browsers. 'The legislators said they were concerned that these options for consumers might restrict, ‘the flow of data at the heart of the Internet’s success'. In a related row, Microsoft found itself the – possibly unlikely – champion of consumer rights when it was targeted by Big Brands about its decision to make DNT the default on the latest version of Explorer.

Meanwhile Google is in a simililarly high-stakes battle with the European Union about what the technology giant's ex-supremo, Eric Schmidt, called the ‘creepy line’ and where it sits. (In reality, the identification of such a distinction is likely to be elusive with so many grey areas appearing, such as the use of anonymised data). Whereas in the UK, the Government has launched Midata that promises to force companies to disclose the information they hold about their customers.

The temptations for brands to snoop are easy to understand and the industry to help them do so is booming. Whilst at the moment techniques are largely focused on the online world, it’s not difficult to see how their use will extend in the near future. John Wren, the Uber Grand Fromage at Omnicom recently spoke of his expectation that all media will eventually be bought and sold using such methods. Words which must have sent a shiver through traditional media companies that have historically traded using a good lunch and their own statistical models such as Neilsen’s and BARB’s TV ratings. These systems rely on extrapolated panel data as oppose to the 'digital exhaust fumes' of real-time behavioural information, and increasingly look like historical artefacts.

A New Consumer Contract

However, brands beware. It will be vital to take a measured approach if they want to stay on the right side of public opinion. While most consumers understand the new networked media contract whereby we give up personal information in return for useful or entertaining services, they are highly attuned to companies overstepping the mark.

When the contract feels right to the consumer, such as is the case with Nike+, the massively popular service that offers jogging goodies in exchange for information about how customers train, it’s a hugely powerful asset. However, when a brand is just snooping and not offering much back in return the creep factor quickly builds. Worse still if brands appear to be just snooping without any payback at all.

There’s been much talk recently of CMOs spending more dosh on technology than CIOs. Part of this expectation is the belief that marketing departments will become data warehouses collecting ever more specific information about people and using powerful Big Data analysis tools to pinpoint likely customers. However, such mass snooping is likely to just drive people into the arms of new services such as the rapidly-expanding search engine Duck Duck Go that promises to never track its users. Or the Locker Project which aims to help people keep their online data trails private.

Consumers tired of being targeted by Big Brands are unlikely to reward marketers who switch from mass marketing to mass snooping. Only the brands that understand the new networked media contract in its broader sense are likely to prosper. That means marketing folk lifting their heads from analytical dashboards and viewing consumers as individuals - not just digital data trails to be bottled, bought and sold.